United Airlines and Its Parent Corp UAL Corporation File For Chapter 11 Reorganization

United Airlines and
Its Parent Corp UAL CorporationFile For Chapter 11
Reorganization

December 9, 2002,UAL Corp.
(NYSE: UAL), the parent company of United Airlines, today announced it
and certain of its U.S. subsidiaries have filed for protection under Chapter
11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Northern
District of Illinois, Eastern Division in Chicago. The Chapter 11 process
will facilitate UAL’s restructuring which is designed to restore the company
to long-term financial health while operating in the normal course of business.

UAL said that during its Chapter
11 case, it will maintain its ability to continue its global operations
and continue its long-standing commitment to its customers, safety and
reliability. Chapter 11 permits a company to continue operations in the
normal course while it develops a plan of reorganization to address its
existing debt, capital and cost structures. Glenn F. Tilton, chairman, president
and chief executive officer of UAL, said, “United Airlines will continue
to provide customers with the same experience and level of service they
have come to expect. We stand by our commitment to provide customers with
convenient schedules, quality onboard services and the most extensive route
network in the U.S. and abroad. Most importantly, throughout this process,
customer safety will continue to be our number one priority.

We have a solid record as a
safe and reliable airline, and we intend to maintain and build upon that
record.” UAL stressed that it is business
as usual and that current and future tickets on United flights will be
honored, and United will continue to participate fully in the Star Alliance.
Mileage Plus participants continue to be able to accrue and redeem mileage
on United and all partner airlines. The company said that its other code-share
agreements will not be affected by the filing. Red Carpet Clubs remain
open and ready to serve customers.

To ensure the smooth operation of
the airline, the company said that it has requested relief from the bankruptcy
court allowing it to, among other things, continue customer programs including
Mileage Plus and Red Carpet Clubs, continue making regular and timely payments
to fuel vendors, hotels and other services, obtain debtor-in-possession
financing, assume clearinghouse and interline contracts and pay employee
salaries, wages and benefits without interruption.

UAL reported that in conjunction
with its filing, it has arranged commitments for $1.5 billion in debtor-in-possession
(DIP) financing. The DIP financing is structured as a $300 million facility
from Bank One and a $1.2 billion facility from a group that is led by J.P.
Morgan Chase and Citibank, and includes CIT Group and Bank One. Access
to $700 million of the $1.2 billion facility is subject to certain terms
of the facility. Such terms require that the company achieve performance
milestones under its business plan, which include substantial cost savings
in the near term. In addition to approximately $800 million in unrestricted
cash-on-hand, the DIP financing will provide adequate liquidity to meet
the anticipated needs of UAL and all of its operating units to continue
normal operations throughout the Chapter 11 process.